Moody's affirms Mactec; outlook up to stable

Moody's Investors Service has affirmed the B2 corporate family rating of Mactec, Inc. and changed the rating outlook to stable from negative.

The company's first-lien bank debt ratings have been upgraded to Ba3 from B1, the agency said.

According to Moody's, the stabilized outlook reflects a view that Mactec's cost reductions, coupled with progress made in expanding sales to the federal sector, and 2009 backlog gains, should help sustain credit metrics in line with the B2 rating.

However, in Moody's view, the write-off risk should be manageable within the B2 context based on steps Mactec has taken to increase recovery prospects, relatively good performance thus far during the recession, and expectation of further backlog increases as fiscal stimulus projects unfold.

The B2 rating reflects the company's small size and exposure to weak, cyclical construction markets against an adequate liquidity profile, moderate leverage, profitability and good cash flow generation, the agency noted.

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